Significant rise in complaints to payday lenders

October 24, 2018

44

There has been a surge in customers of payday lenders demanding compensation for being unfairly treated in the light of Wonga going into administration. Now, lenders are being ordered by the Financial Conduct Authority (FCA) to offer compensation for any mis-sold payday loans, even if the compensation payments would result in company falling into bankruptcy.

According to the FCA, it is the lenders responsibility to contact their customers and alert them of the possibility of compensation if the creditworthiness assessments have been compromised on the lenders behalf.

As described by Payday Bad Credit, the customers mostly likely to be owed compensation include those that defaulted on their loans as long as 3,4 or 5 years ago who should not have been granted loans due to very poor credit, being unemployed, on benefits or already in serious debt.

The FCA set the rules as of 2014 and if your payday lender does not follow the rules, then you are can make a complaint directly to the lender. If you are not satisfied with their response and you believe your case is strong, you can take your case to the Financial Ombudsman who will decide if you receive compensation and how much you are deserving of.

What you can complain about

You are going to be eligible to get compensation from a payday lender if you think that:

Your lender did not make it clear how much the loan would cost overall. This means the price of the loan along with any fees and interest.

You were not provided with full or accurate information regarding how and when you had to pay back the loan. You should point out what is missing or inaccurate in your complaint.

Your lender did not check your finances or your personal circumstances to work out whether the loan was actually affordable for you. When making a complaint, you should highlight things that should be taken into account such as your age, your employment status, income, financial history and so on.

The lender did not let you know that you should not use a payday loan to cover long-term problems. Payday loans are short-term.

The lender did not inform you how to make a complaint at all.

Your lender did not inform you in advance that they were going to take money from your account using CPA

Your lender did not issue a risk warning about any late repayments in the online advert or in an advert which was sent directly to you via text or email. From the 1st of July 2018, all payday loan adverts had to include this.